Blackstone Minerals Ltd (ASX:BSX, OTCQX:BLSTF) has made a strategic investment in Flying Nickel Mining Corp, a subsidiary of Vancouver-based Silver Elephant Mining Corp, gaining exposure to a large nickel sulphide project and advancing efforts toward a fully vertically integrated battery metals business.
Flying Nickel intends to list on the TSX Ventures Exchange in early 2022 with its core asset, the Minago Nickel Sulphide Project southwest of Thompson in Manitoba, Canada.
Minago is an advanced stage development asset with district-scale exploration potential and access to infrastructure including renewable hydropower. Blackstone’s initial investment of C$2.98 million will earn a 6.85% interest in the common equity of Flying Nickel.
“Higher nickel prices here to stay”
“The known mineral endowment of the Minago asset in combination with the potential of the Ta Khoa district [in Vietnam] represents enviable scale, being highly sought after by OEMs, battery and cathode manufacturers,” Blackstone Minerals managing director Scott Williamson said.
“Large, disseminated nickel sulphide deposits of the size and grade of the Minago asset are difficult to find. The ongoing structural evolution of nickel supply chains and increasing demand for downstream nickel chemical products for the lithium-ion battery industry, is driving a unanimous view by analysts and the broader investment community that higher nickel prices are here to stay for longer.
“This means that large undeveloped opportunities such as Minago are primed to overcome previous barriers, including access to capital.
“The Flying Nickel Transaction provides Blackstone with the opportunity to collaborate on the development of Minago and confidence to inject future equity into the asset as it is progressively de-risked.
“The Ta Khoa Refinery in Vietnam is a logical home for Minago concentrate. Manitoba, like Northern Vietnam, is blessed with access to renewable hydropower.
"Shipping a high-grade concentrate minimises carbon footprint and is aligned with Blackstone’s commitment to best ESG practices and ambition to become a supplier of choice to the electric vehicle battery industry.”
The two companies have also entered into a Memorandum of Understanding that will support collaboration on the production of upstream and downstream nickel and cobalt concentrates and chemical products, as well as potential offtake and/or joint ventures to meet demand from the growing electrical vehicle battery industry.
The equity investment and MoU jointly represent the 'Flying Nickel Transaction'.
Highlights of the transaction
Silver Elephant Mining Corp's wholly-owned subsidiary Flying Nickel holds 100% of the Minago asset.
Blackstone is participating in a private placement that will lead to the Minago asset held by Flying Nickel being spun out of Silver Elephant, with Flying Nickel separately listed on the TSX-V. The Flying Nickel Transaction is subject to Silver Elephant shareholder approval due late December 2021.
Highlights of this transaction include:
Minago is a large undeveloped disseminated nickel sulphide asset poised to benefit and attract significant investment from the structural shift in nickel supply and demand driven by the growth of electric vehicle adoption.
Minago has a NI 43-101 compliant measured & indicated resource of 44.23 million tonnes at 0.74% nickel for 721.6 million pounds of nickel, and an inferred resource of 19.55 million tonnes at 0.74% nickel for 318.9 million pounds nickel.
Prior metallurgical test-work by SGS has demonstrated that Minago is able to produce one of the highest nickel concentrate grades in the world (over 20%) using conventional technology.
Blackstone and Flying Nickel will form a Steering Committee which will include an ongoing assessment of opportunities to enter into supply, offtake and financing arrangements relating to upstream and downstream nickel and cobalt products produced at Minago.
The MoU includes a legally binding anti-dilutionary clause ensuring Blackstone is able to maintain its equity interest at the time of each potential fundraising event performed by Flying Nickel.
About Blackstone Minerals
Blackstone Minerals is focused on building a district-scale, integrated upstream and downstream battery metals processing business in Vietnam that produces Nickel: Cobalt: Manganese Precursor products for Asia’s growing Lithium-ion battery industry.
The company owns a 90% interest in the Ta Khoa Nickel-Copper-PGE Project 160 kilometres west of Hanoi in the Son La Province of Vietnam and includes an existing modern nickel mine built to Australian standards and currently under care and maintenance.